What Ozempic, AI and layoffs have in common for CEOs

GLP-1 drugs and artificial intelligence are helping people and organizations, respectively, slim down. And people are reluctant to credit them entirely for the results.

"Nobody I know is on Ozempic. Yet, nearly everyone I know is on Ozempic," Scott Galloway, professor of marketing at NYU Stern School of Business, begins his Feb. 23 essay, "Corporate Ozempic." 

Mr. Galloway posits that people are hesitant to credit a drug for losing those last 15 pounds — doing so "doesn't fit with our narrative that success is correlated to self-control," he writes. Similarly, he points to large companies — particularly those in tech — trimming their workforces and posting big profits, but being coy about AI's contributions toward both.

Companies planned 721,677 job cuts in 2023, a 98% increase from cuts in 2022 and the highest annual total since 2020. With the exception of the first pandemic year, 2023 layoffs mark the highest total since 2009, according to Challenger, Gray & Christmas.

"I believe AI is playing a larger role in layoffs than CEOs are willing to admit," Mr. Galloway writes. "There have been hints: IBM's chief said the company plans to pause hiring for positions that could be replaced by AI, and UPS acknowledged that AI factored into its recent layoffs."

He says as a general rule, one can expect CEOs to continue to exercise restraint and reluctance in how they link the fastest-growing technology in history to the smaller size and efficacy of their workforce. CEOs will expectedly put space between these two concurrent trends. "It's rare that growth and the size of your employee base are inversely correlated. And it doesn't make for a good all-hands narrative: "We've had a record quarter, and we're going to need fewer of you," said Mr. Galloway. 

That's actually what tipped Mr. Galloway off to this trend in the first place, he notes — leaders saying that workforce shifts are not due to AI. 

"It's the denials that first raised my antennae: 'We're not restructuring because AI is taking away roles,' Alphabet's Chief Business Officer Philipp Schindler told analysts on the company's most recent earnings call. That's the 'I gave up gluten' of tech." 

Mr. Galloway is also the  co-host of the podcast "Pivot" with tech journalist Kara Swisher. Find Mr. Galloway's essay and newsletter exploring GLP-1s, AI and layoffs here on "No Mercy, No Malice."

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